## Cafe Economics Transforming Economics Teaching Wendy Carlin

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## Bibliographic details
- Authors: WENDY CARLIN
- Published: February 20, 2024

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### Background and CORE Econ
- In the early 2010s, a widespread feeling that economics teaching was failing students prompted a group of professors to revamp the undergraduate economics curriculum.
- In 2013, Wendy Carlin, Samuel Bowles of the Santa Fe Institute, and others including Oscar Landerretche from the University of Chile founded Curriculum Open-access Resources in Economics—also known as CORE Econ—to provide high-quality, open-access courses to students and teachers worldwide.
- CORE Econ’s stated aims: include issues such as climate change, inequality, innovation, and the future of work; broaden the standard curriculum; increase access to economics education; and attract and retain a more diverse student body.
- Wendy Carlin is identified as a professor of economics at University College London and the newly elected vice president of the International Economic Association.
- CORE project URL: www.core-econ.org

### Public perception and the scope of economics
- Common public image: supply and demand curves crossing; the word “money”; “a white man in a suit pointing at a spreadsheet or at a screen with stock prices.”
- Public perception summarized: “economics is mainly about markets working well,” reflecting traditional Economics 101 teaching.
- Carlin’s assessment: this narrow view implies economics has little to contribute to addressing a pandemic or the climate crisis.
- Developments in economic theory, empirical tools, and data availability have moved economists away from narrow debates about government intervention versus market solutions.

### Relevance to real-world problems: pandemic and climate
- Pandemic implications:
  - Fear of disease produced spillovers to economic relationships between people and problems within firms (managers vs. workers).
  - Conventional introductory models do not capture who exerts power within the firm, though Ronald Coase considered such issues “economics.”
  - An expanded economics includes non-market interactions and addresses outcomes beyond efficiency.
- Climate implications:
  - Traditional debate framed as state solutions (e.g., bans, subsidies) versus market solutions (carbon tax, cap and trade).
  - Carlin’s view: both state and market measures are valuable but likely inadequate alone; changing preferences toward greener initiatives can complement both.

### Behavioral, institutional, and interdisciplinary approaches
- Expanding economics beyond Homo economicus incorporates altruism, reciprocity, dignity, sustainability, and “in- and out-group” thinking; social norms and private power become crucial.
- Institutions defined as “the rules of the game that specify who does what and who gets what.”
- Contributions from psychology, evolutionary biology, sociology, political science, and history become relevant.
- Behavioral economists use experimental methods in the lab and the field, drawing from social psychology and evolutionary biology.
- Economists retain strengths in rigorous hypothesis testing using sophisticated techniques and better data, and in modeling general equilibrium effects (often unintended) of policy interventions.

### Ethics, normative questions, and pedagogy
- Over the last decade, “inequality” is the most common response to “What is the most pressing problem economists today should be addressing?” Climate and sustainability rank second.
- Ethical questions highlighted: fairness of inequality; intergenerational weighting in climate-cost–benefit calculations.
- Carlin’s pedagogical point: economists should equip students with analytical tools to connect positive analysis to normative criteria, rather than treating normative questions as outside economics.
- Current narrow focus: evaluating outcomes primarily in terms of efficiency, often via the Pareto improvement criterion, which can bias toward the status quo.
- Teaching device: John Rawls’ veil of ignorance to prompt students to evaluate fairness by imagining they do not know whether they would be a winner or a loser.

### Curriculum reform: COherent and RElevant; The Economy 2.0
- The curriculum should be COherent and RElevant—the capitalization signals the CORE Econ project’s implementation of radical change in introductory economics.
- New curriculum requirements:
  - Reflect contemporary problems and show that economics provides tools to engage with them.
  - Be anchored in a new benchmark model reflecting 30 or 40 years of research on realistic behavior, interaction under incomplete information, and policy implications.
- CORE’s e-book The Economy 2.0:
  - Presents a new way of teaching how labor markets actually work, reflecting recent decades of research on monopsony power.
  - The model helps students understand the effects of the minimum wage and models how the aggregate labor market functions as part of an integrated treatment of unemployment, real wages, and inflation.
- Curriculum should expose students to models with instability and multiple equilibria for topics such as housing and financial market crises, environmental tipping points, and adoption dynamics for new technologies (e.g., electric vehicles).
- Pedagogical goal: teach a broader lesson about how different economic models can illuminate distinct complex problems.

*F&D Magazine — Transforming Economics Teaching, WENDY CARLIN, March 2024*

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_Source: https://www.imf.org/en/publications/fandd/issues/2024/03/cafe-economics-transforming-economics-teaching-wendy-carlin_